Trump administration slams New York Fed study that says US consumers bear the cost of tariffs
The Trump administration is challenging a new paper from the New York Federal Reserve that claims U.S. consumers and businesses are bearing the bulk of the higher costs from tariffs imposed last year.
“This article is disgraceful,” National Economic Council Director Kevin Hassett told CNBC on Wednesday. “I think this is the worst article I’ve ever seen in the history of the Federal Reserve System. The people involved with this article probably need to be disciplined, because what they did was put forward a conclusion that created a lot of highly partisan news based on analysis that would not be acceptable in a first-semester economics class.”
Authors Mary Amiti, director of labor and product markets at the New York Fed’s Research and Statistics Group, with research analyst Chris Flanagan and research economist Sebastian Heise, Analyzed the tariffs introduced last year and found that 94% of it would be covered by the US in the first eight months of 2025. Only 6% of these costs were covered by foreign exporters.
The analysis covered 12-month changes from January 2024 to November 2025 (latest data available). The analysis also highlighted how the pass-through of costs changes throughout 2025. For example, as of November, the pass-through of costs in the USA had fallen to 86%.
Read more: Latest news and updates on Trump’s tariffs
The authors said their results showed that a 10% tariff led to only a 0.6 percentage point decrease in foreign export prices. But they also found that the pass-through of tariffs to import prices decreased late last year as more exporters bore the cost of the tariffs. In November, a 10% tariff was associated with a 1.4% decline in overseas export prices, but still produced an 86% pass-through to U.S. import prices.
High import prices are causing companies to reorganize their supply chains, the authors said.
“In summary, U.S. firms and consumers continue to bear the bulk of the economic burden of higher tariffs imposed in 2025,” the authors wrote.
Read more: What Trump’s tariffs mean for the economy and your wallet
Hassett argues that tariffs affect numerous price factors, including supply and demand, that vary around consumer and producer surplus.
“They’re basically just looking at changes in prices,” Hassett said.
He also noted other measures that show consumers are better off, such as low inflation and higher wages.
“Incomes have risen far more than the cost of living, and that’s real wage growth that this ridiculous Fed study neglects to mention,” Hassett said. he said.
